Marginal costing focuses on:

**The reasoning** Marginal costing is a decision-making technique that separates costs by **behavior**, not just totals. It focuses on **variable costs** (costs that change with production volume—like raw materials, direct labor) and **contribution** (selling price minus variable cost per unit). The key formula: **Contribution = Sales − Variable Costs** This contribution then covers fixed costs and generates profit. Marginal costing helps managers answer questions like: "Should we accept this special order?" or "Which product is most profitable?" by looking at what each unit *contributes* after covering its variable costs. **Why the wrong options tempt you** **A) Total costs only** — Sounds comprehensive, but marginal costing deliberately *ignores* fixed costs in unit costing to focus on what changes with each decision. **C) Fixed costs only** — The opposite trap! Fixed costs (rent, salaries) exist regardless of production, so they're treated as period costs, not unit costs in marginal costing. **D) Sales taxes** — Completely unrelated. That's taxation, not cost accounting. **Quick takeaway** Remember: **"Marginal = Variable + Contribution"** — it's about tracking what *moves* with production and what each unit *contributes* to covering fixed costs.